U.S. home loan applications climbed last week, as lower mortgage rates spurred demand for refinancings and overshadowed a small drop in applications to buy houses, an industry group said on Wednesday.
The Mortgage Bankers Association's seasonally adjusted mortgage application index rose 2.5 percent to 743.4 in the week ended April 11.
It was the second weekly increase in the volatile gauge of mortgage applications, pushing the measure well above a reading of 630.6 a year earlier.
Average 30-year home loan rates dropped 0.04 percentage point in the latest week to 5.74 percent, nearly half a percentage point lower than a year ago, according to the MBA.
With long-term mortgage rates easing, the MBA's seasonally adjusted refinancing applications index gained 5.2 percent to 2,866.0, easily offsetting the 0.8 percent decline in home purchase applications to 381.6 last week.
While total mortgage purchase requests edged lower last week, a sub-index of purchase applications for loans backed by government programs such as the Federal Housing Administration rose 3.5 percent to 192.4, up sharply from 84.0 a year ago.
The government has broadened the reach of the FHA program and some lawmakers are pushing for an even greater expansion to help homeowners facing foreclosure.
The overall slide in applications to purchase homes follows two separate reports on Tuesday, which showed a steady drumbeat of mortgage defaults and dreary home-builder sentiment.
Foreclosures in March rose 5 percent from the prior month, and soared 57 percent over 12 months, real estate data company RealtyTrac said.
A gauge of home builder sentiment held at 20 for a third straight month in April, just above its record low of 18 set in December 2007, with spring shopping not pumping new home sales by much, the National Association of Home Builders said.